ECONOMYNEXT – Inflation measured by the Sri Lanka Christmas cake, widely acclaimed to be the world’s most delicious, rich, ‘decadent’ and interesting confection, has risen by 4.4 percent, amid rupee depreciation, an analysis of retail prices show.
The cost of 11 key ingredients rose to 15,180 rupees in 2025, up from 14,744 in 2024 with rupee inflating 5.3 percent.
In the 12 month to November, the rupee fell from 290.90 rupees to 306.30 to the US dollar, as the central bank selectively denied convertibility to private citizens and bought dollars in excess of deflationary policy, pushing the unfortunate currency down.
Sri Lanka’s currency is inadequately protected from discretionary central bank action (flexible exchange rate) analysts have said.
To protect the people and prevent a next default from the sharp edge of discretionary inflationism (flexible inflation targeting) from a high inflation target which appears to be a floor, calls have been made for a true restraint made up of a low ceiling.
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In 2025, US monetary policy was relatively benign, with steady quantity tightening (deflationary policy), slightly taming its abundant reserve regime, which critics say is one of the deadliest frameworks ever seen in the history of note issue banking.
The Sri Lanka Christmas cake is a result of Dutch, British influences and a mix of candied ingredients made by traditional processes found in Sri Lanka (chow-chow and pumpkin preserve), and imports (sultanas, raisins, and cherries)
“The Romans might have invented the fruitcake, but Sri Lanka, a tiny island in the Indian Ocean, perfected it,” according to the Australian foodie site SBSFood.com in a post titled The best Christmas cake you’ll ever eat comes from Sri Lanka.
“The cake is traditionally iced with marzipan made from local cashews, not almonds, then cut into small rectangles and wrapped in coloured cellophane.
“Sri Lankan Christmas Cake is is not your typical fruit cake,” adds kitchensimmer.com
“Yes, it has some fruit and nuts, but it’s got so much more rich and delicious ingredients that it’s bursting with flavor.”
“For years I firmly believed that I had tried every single variation of the Christmas cake possible. Light, dark, moist, dry, British, Scottish, Italian, Serbian, according to an award winning food blogger and writer at Food52.com.
“I would have never thought that the richest, the most decadent, the most interesting and the most delicious Christmas cake of all would come from Sri Lanka.”
The Sri Lanka Christmas cake does not use flour, but semolina.
Semolina prices shot up to 752 rupees a kilogram in 2022, with the Fed firing a massive commodity bubble after Covid-19 linked injections.
Amusingly, inflationist macro-economists as well as the International Monetary Fund, blamed Putin for the inflation.
But the Fed began deflationary policy and rate hikes in March 2022 and wheat prices started to fall from the second half of 2022.
Semolina prices have since halved and stayed there.
However, the Federal Reserve deflationary policy has since been ended. Gold prices hit 4,480 dollars an ounce in December 2025.
Gold was 20 dollars an ounce when the Fed Reserve was created and for about two centuries earlier.
The Fed invented open market operations giving rise to peacetime economic bubbles that imposed immense hardships on the poor as well as businesses and government finances, when they burst. (Colombo/Dec25/2025)